Redress Scheme (Lettings)

Requirement

From the 1 October 2014, it was a legal requirement for all lettings agents and property managers in England to belong to a Government approved redress scheme.

The Law

The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014.This order is linked with Part 6 Enterprise and Regulatory Reform Act 2013 as part of the Government proposals to improve standards in the private rented sector.

The Purpose

The Approved Redress Schemes provide a means by which unresolved complaints about the work of Lettings and Property Management Agents can be referred to and reviewed by an independent third party (Ombudsman). After joining a redress scheme Managing and Lettings Agents are obliged to comply with the Ombudsman’s decision, if a complaint is made.

The order applies to those involved in one of the two types of property work:-

Letting agency work; and

Property management work

If you are not clear whether the requirement applies in your individual circumstances, you should seek legal advice.

What is Letting Agency Work?

Lettings agency work is defined as things done by any person in the course of a business in response to instructions from either a private rented sector landlord who wants to find a tenant, or a tenant who wants to find a property in the private rented sector.

Further information on how the law applies to your business is contained in guidance issued by the Department of Communities and Local Government

What is Property Management Work?

Property management work is categorised as things done by a person in the course of a business in response to instructions from another person who wants to arrange services, repairs, maintenance, improvements, insurance, or to deal with any other aspect of the management of premises consisting of, or containing, a dwelling-house let under either a long lease, an assured tenancy or a protected tenancy.

Further information on how the law applies to your business is contained in guidance issued by the Department of Communities and Local Government

If an Agent does not join a Government approved redress scheme they can be subject to a £5,000 fine from the local authority and if they continue to breach their legal requirement to join such a scheme they can ultimately be closed down.

If you require further information contact Environmental Health on 01543-462621